Estate and Gift Tax Exemptions Coming in 2022

Beginning Jan. 1, 2022, the amount that you can leave estate tax free (AEA) is changed to $12,060,000 (rather than the current $11.7M). This amount is reduced by prior gifts you have made which exceed the annual gift tax exclusion of $15,000.

Beginning in 2026, the AEA is scheduled to be reduced to approximately $6.5M, which will limit your ability to leave as much value estate tax free as you currently can. In addition, the current administration is trying to reduce the AEA sooner than 2026.

The amount you can gift each year without reporting the gift to the IRS has also been increased. The new gift tax exemption amount will be $16,000 per year per person, up from $15,000.